Thursday, June 25, 2009

Medvedev trip looks to secure Africa’s riches

The Moscow Times | 23 June 2009 - By Maria Antonova / The Moscow Times

President Dmitry Medvedev is embarking Tuesday on a four-day African tour, beginning with a visit to Egyptian President Hosni Mubarak before moving on to Nigeria, Namibia and Angola.

While international affairs, particularly the Israeli-Palestinian conflict and the disputed Iranian elections, could come up in Egypt, Medvedev’s trip appears focused on helping Russian companies gain additional access to the continent’s natural resources wealth.

Medvedev’s visit will be only the second time a Russian president has traveled to sub-Saharan Africa. Vladimir Putin visited South Africa and Morocco in 2006, and he also met with Mubarak in Cairo in 2005.

The long-serving Egyptian president elicited a frown from then-President Putin on his most recent visit to Moscow, in March 2008, when he joked that he saw "few differences" between him and President-elect Medvedev. Mubarak said he confused the two when he saw them on television.

The presidents will have plenty to discuss, particularly economic ties that comprised just 0.3 percent of Russia’s overall foreign trade in the first four months of 2009. Energy will likely top the agenda, as both Energy Minister Sergei Shmatko and Rosatom chief Sergei Kiriyenko are accompanying Medvedev.

Rosatom, the state nuclear corporation, is planning to sign a deal in Egypt that would allow it to bid for the right to build the country’s first nuclear power station and to explore for uranium, spokesman Sergei Novikov said.

Gazprom has expressed interest in investing in Egypt and Nigeria, both members of the Gas Exporting Countries Forum. The group, which also includes Russia and Iran, is scheduled to hold its next meeting on June 30 in Doha, Qatar.

It was unclear, however, whether Gazprom chief Alexei Miller would accompany Medvedev on the trip. All Gazprom executives are planning to stay in Moscow this week to attend the annual shareholders meeting Friday, a company spokesman said.

An Energy Ministry spokesman said there was no final decision on whether Miller would go to Africa.

Miller met with Mahmud Latif, chairman of the Egyptian Natural Gas Holding Company, in December to discuss opportunities for Gazprom to join exploration and production projects there, including buying into Egypt’s two liquefied natural gas plants.

Egypt is the world’s eighth-largest LNG exporter, but it wants to meet rising local demand before committing to any new export deals.

Medvedev will also seek to rekindle the Soviet Union’s once-close ties with Egypt, which have been complicated recently by a dispute over the quality of Russian grain exports. Last month, Egypt declined to accept Russian grain after it said a 137,000-ton shipment contained an excess of insects and seeds. The Federal Phytosanitary Inspection Service, Russia’s agriculture watchdog, consequently rejected 168 tons of Egyptian oranges in the port of Novorossiisk after finding a large number of Mediterranean fruit flies in a shipment, but Russian Foreign Ministry officials said the grain dispute would not hurt relations.

Medvedev and Mubarak are expected to sign five bilateral agreements in the spheres of security, justice, environment, culture and information, Egyptian Foreign Minister Ahmed Aboul-Gheit said last week, the Mena news agency reported.

The visit comes on the heels of U.S. President Barack Obama’s well-received visit to Cairo earlier this month. But the situation in the region has already shifted, rocked by the mass protests over the Iranian presidential election, making Medvedev’s visit to the regional power broker "extremely timely," said Yevgeny Satanovsky, director of the Institute of Middle Eastern Studies.

At the same time, thousands of Russian students travel to Egypt to pursue Islamic studies and often "come back as radical Islamists," Satanovsky said. "It is necessary for the countries to coordinate actions in preventing their radicalization."

Thirty Russian citizens were detained in Egypt earlier this month during a police document check at a Cairo university. Four Chechens were deported to Russia last week despite concerns for their safety, and one of them, the son of a rebel leader, has not been seen since arriving at a Moscow airport.

Despite the relatively modest $600 million in trade from January to April, Russian grain exports and Egypt-bound tourists make it Moscow’s biggest economic partner on the trip.

In Nigeria, Medvedev is expected to focus more on energy. Gazprom was picked by Nigeria as one of 15 companies in April to be core investors in the exploration and production of its gas reserves, the world’s seventh-largest.

In September, Gazprom and the state-owned Nigerian National Petroleum Company signed an agreement to look for joint projects to develop gas fields and transport the fuel.

Gazprom also signed a memorandum of understanding with NNPC in April to analyze three oil blocks there for possible exploration.

Novikov, the Rosatom spokesman, said Kiriyenko was also hoping to sign an agreement in Nigeria, which would allow the countries to cooperate in nuclear energy.

After Nigeria, Medvedev will head southwest to Namibia, where he is scheduled to arrive Wednesday evening. In 2007, VTB, Viktor Vekselberg’s Renova Group and Tekhsnabexport, or TENEX, a unit of Rosatom’s Atomenergoprom holding for civilian nuclear assets, created a joint venture to produce uranium there.

Representatives of uranium miner Atomredmetzoloto, another Rosatom unit, will be going to Namibia, spokesman Vladimir Basov said Monday. The company established a joint venture with VTB and Russian private equity firm Arlan last year to explore uranium deposits in western Namibia.

Medvedev’s last stop is in Namibia’s northern neighbor, Angola, where Alrosa has a branch in the capital, Luanda. The state diamond monopoly said in April that it was pulling out of its joint venture in Angola following the collapse of the world diamond market. Alrosa has also cut production in Russia, where state depository Gokhran has been buying all of the company’s output until prices recover.

The Kremlin press office declined to provide additional information on the trip. Spokespeople at the Egyptian, Nigerian and Angolan embassies in Moscow said they could not comment on the meetings. Calls to the Namibian Embassy went unanswered Monday.